Requirements: The final grade will be based on the writing assignment (30%), homework assignments (20%), a midterm exam (20%), and a final exam (30%).

Course Description:

This course will cover basic concepts, tools and facts needed to understand the functioning of the global economy and international financial markets. We develop a theoretical framework for the analysis of the determinants of current account deficits, international capital movements, real and nominal exchange rates. We also examine the relationship between interest rates and exchange rates, and discuss various measures of global capital market integration. This framework is then used to discuss relevant policy issues such as the emergence of the US as a foreign debtor, the developing country external debt crises and balance-of-payment crises.

Homework Assignments: There will be bi-weekly problem sets. These can be done in pairs. Only one problem set needs to be turned-in if working in pairs. Problem sets are due one week after they are distributed.